HSBC Holdings has filed an application to the Singapore High Court on Wednesday (6 May) to place ZenRock Commodities Trading under judicial management.
This was first reported by Bloomberg/Reuters which said this information is based on three of its sources familiar with the matter.
The Singapore-based ZenRock Commodities trades crude, oil, and petrochemicals products.
The management of the affairs of the company has been relayed to an independent judicial manager under a judicial management.
ZenRock did not immediately respond to media request for comments and HSBC also declined to comment.
The news of ZenRock follows upon the bankruptcy of Singapore oil trader Hin Leong Trading. In April, Hin Leong Trading was placed under interim judicial management as the company was saddled with debts of S$5.7 billion to more than 20 banks.
Hin Leong is being investigated by the Commercial Affairs Department (CAD), which is the white-collar crime unit of Singapore police. This is after the founder of the Asian giant independent oil trader, Lim Oon Kuin, confessed to hiding S$1.13 billion in losses due to trading in oil futures.
ZenRock released a statement in late April to reassure its clients that the company was not under financial duress following the news of Hin Leong’s collapse.
In separate statements on 23 April by ZenRock and another company, Winson Group, they stated that their financial positions were sound, and neither of them had open-account dealings with Hin Leong. Winson Group buys and sells fuels like bunker oil and gas oil across the Asian region.
Furthermore, ZenRock clarified in its statement that it was not under insolvency or statutory protection. Although its business had been impacted by the oversupply and negative oil prices, the global COVID-19 lockdown and the weakened Chinese demand, the company noted that it has “the ability and experience to work through them profitability”.
A group of traders, including Xie Chun, ZenRock’s President, and Tony Lin founded the company in Singapore in 2014. Mr Chun was formerly from Unipec whereas Mr Lin was formerly the Head of Vitol’s China.
ZenRock has offices in Geneva, Shanghai, and Singapore.